MediaPost reports on a speech Craigslist CEO Jim Buckmaster gave to the investment community at UBS’ 34th Annual Global Media & Communications Conference in New York.
According to the article, it was a “culture clash of near-epic proportions”. When an UBS analyst asked him “How does the site plan to maximize revenue? “, Buckmaster replied “That definitely is not part of the equation. It’s not part of the goal.”
“Buckmaster insisted that the company doesn’t especially want to make money. While it charges for job listings in seven cities ($75 in San Francisco, $25 in the other six) and apartment listings by brokers in New York ($10), those charges aren’t to make a profit as much as to cover expenses and keep out scammers, Buckmaster said. He added that some users requested the fees, in hopes of keeping the listings legitimate.” When asked: “How did the site arrive at $10 for real estate listings”, he responded “Ten dollars sounded like a nice round number”.
He was also asked questions about how the site could make more money, more specifically with text ads from Google. He said they had been approached, that the numbers had been crunched for them and that this number was quite staggering but, no, the site wasn’t interested. “No users have been requesting that we run text ads, so for us, that’s the end of the story. If users start calling out for text ads, we’ll listen.”
The ZDNet blog has more excerpts from his speech: “When asked why Craigslist wouldn’t use eBay technologies such as PayPal (eBay owns 25% of Craigslist), Buckmaster says users haven’t clamored for it. “eBay has fantastic technology but the key difference is that 90 percent of eBay transactions are over a long distance,” says Buckmaster. “Ninety-five percent of our transactions are between people that live near each other. It’s wonderful as a technology but not relevant to what we do.”
According to a joint UBS & Comscore report discussed on John Battelle’s blog, Craigslist was #8 in the US in terms of page views, #6 in terms of Average Minutes Per Day Per Visitor and 3# in terms of Average Pages Per Day Per Visitor.
Update: Mathew Ingram tries to calculate how much Craigslist is worth: “Craigslist currently gets a mind-blowing 5 billion page views or so a month. A premier site like Craigslist — and one that is focused on classified advertising, which is inherently purchasing-type behaviour — would likely command a fairly high CPM rate for ads. Let’s say theoretically it was $10 per thousand. That would bring in $50-million a month (StartupBoy says Craigslist is worth more than eBay, and he doesn’t even include ads).”
What it means: As his bio says, Jim Buckmaster is possibly the “only CEO ever accused of being anti-establishment, a communist, and a socialistic anarchist” :-). But kidding aside, if you’re in the same space as Craigslist, what do you do with a competitor that does not play by “your rules”? Do you use the same strategy that you’re using with other “typical” competitors or do you have to play by “their rules”. I think this is yet another example of a company that has always been user-focused and has drastically succeeded like Google. And I think you have no choice but to follow their lead and improve on what they are doing.